Rekha Jhunjhunwala Adds Stake in this Tata Stock while Trimming Her Position in Another One

Earlier this week, we wrote to you about Rekha Jhunjhunwala trimming some of her stake in a private bank stock called Federal Bank.

Adding to the list of stocks that Rekha Jhunjhunwala bought and sold, two prominent Tata group companies have come under investors' focus this week.

A Word About Rekha Jhunjhunwala

Rekha Jhunjhunwala is the wife of Rakesh Jhunjhunwala.

Rakesh Jhunjhunwala was an Indian billionaire stock trader and investor.

He used to manage his portfolio as a partner in his asset management firm, Rare Enterprises. He invested in both his own and his wife's name, Rekha Jhunjhunwala. He held the designation of Chartered Accountant.

Rakesh Jhunjhunwala was known as India's Warren Buffett. According to Forbes, Jhunjhunwala was the 36th richest man in the country. He was worth Rs 460 bn when he passed away on 14 August 2022.

He was a director on the boards of several companies, including Viceroy Hotels, Concord Biotech, Provogue India, and Geojit Financial Services.

Which Tata Group Stocks Did Rekha Jhunjhunwala Sell and Why?

The stocks in question are Tata Motors and Titan Company.

As both these companies filed their shareholding for the quarter ended September 2024, it was revealed that Jhunjhunwalas have added a minority stake in Tata Motors while they offloaded some of their holding in Titan.

Despite these recent transactions, Jhunjhunwalas continue to hold a prominent stake in both these Tata companies.

As the above image shows, Rekha Jhunjhunwala sold 0.2% in Titan during the July-September 2024 quarter while she added 0.02% of Tata Motors.

A Close Look at Titan and its Growth Plans

Titan derives close to 90% of its revenue from the jewellery division. It sells jewellery through its brands Tanishq, Zoya, Mia, and CaratLane.

Titan is usually the first company that comes to everyone's mind when thinking about wedding stocks in India.

The company's watches also see strong demand as a popular gift during the wedding season.

It recently expanded into the clothing business by launching a new brand Taneira, which has sarees and ethnic wear, which again make up a large portion of the wedding purchases.

With gold being considered an auspicious metal, the demand for Titan's products goes up during the wedding season.

Coming to Titan's financials, over the last 5 years, Titan's revenue, operating profit, and net profit grew by a CAGR of 19%, 17%, and 18% respectively.

Diversified business, strong leadership in the market, new product launches helped the revenue and profit growth.

Its operating profit and net profit margins averaged at 11.6% and 6.8% respectively over the last five years.

Financial Snapshot

Currently, Titan is focussing on retail expansion of Tanishq stores and expanding its new business segment namely dresswear and fragrance.

This Tata group company has in the past, managed to do what the rest of the industry has struggled to achieve. It has been able to charge a hefty premium for the jewellery it sells at its Tanishq outlets. Its customers have been more than willing to pay this premium in exchange for the trust and the credibility that Titan commands in the industry.

As the Indian wedding market is witnessing strong growth, Titan is set to witness strong growth in the medium term.

Last month, Titan also opened six new stores in Chandni Chowk, one of the busiest markets in Old Delhi. Encompassing all its stores, Omaxe Chowk leased over 15,000 sq. ft. of space to Titan Company.

Further, Titan Watches has expanded its presence in Kuwait.

Here's how the stock price has performed in the past 1 year -

To know more, checkout Titan's financial factsheet and latest quarterly results.

A Close Look at Tata Motors and its Growth Plans

Tata Motors is a leading global automobile manufacturer.

It offers a wide and diverse portfolio of cars, sports utility vehicles, trucks, buses, and defence vehicles to the world.

The country's largest electric car maker Tata Motors has started working with used car marketplaces to facilitate resale and exchange for EV owners.

The company has the largest car park for EVs in India, estimated to be around 170,000 units. As a pilot, the company has already started work with the used online car marketplace Spinny.

In FY24, the company's consolidated revenue from operations including finance revenues increased by 26.6% to Rs 4.3 trillion (tn) from Rs 3.4 tn in FY23. This increase was mainly attributable to increased vehicle volumes and better mix.

The net profit stood at Rs 313.9 bn in FY24, compared to a net profit of Rs 24.1 bn in FY23. An increase in volumes, better mix, better management of costs, and softening of commodity prices, resulted in the higher profits.

There was a 5% increment in the Jaguar Land Rover contribution to the company's total automotive revenue from 64% to 69% and the remaining 31% was contributed by Tata and other brand vehicles, and vehicle financing in FY24, compared to 36% in FY23.

Financial Snapshot

Tata Motors plans to launch 10 new EV models by 2026. The company also plans to increase the percentage of Tata EV users who also use rooftop solar (RTS) from 10-15% to 50% by the end of the decade.

It's also taking another big step towards its EV push by expanding the Sanand plant in Gujarat. The Sanand plant is Tata Motors' largest manufacturing facility in India. It currently produces a wide range of vehicles which includes the Tiago, Nexon, and Altroz.

The expansion of the Sanand plant will see the addition of a new lithium-ion battery production facility, expected to be operational by as early as 2025. The investment in lithium-ion batteries is part of its broader strategy to transition to electric vehicles.

Going forward, the company is also working on developing its own EV charging infrastructure.

The company is well-placed to capitalise on the growing consumer preference for electric vehicles in India, leading the market with a share of more than 80%.

Here's how the stock price has performed in the past 1 year -

For more details, see the Tata Motors company fact sheet and quarterly results.

In Conclusion

Emulating the moves of super investors like Rekha Jhunjhunwala can offer valuable insights, but it's crucial to remember that their strategies are tailored to their unique financial goals and risk tolerance.

Markets evolve, and what works for them might not suit your situation.

Always ensure your investments align with your personal strategy and goals before making any decisions.

Happy Investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...